Securities Law Blog

In 2008 the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA) and North American Securities Administrators Associate (NASAA) published a joint report to highlight proactive steps that some financial firms have adopted to better serve senior investors as they approach retirement.

On August 13, 2010 the SEC, FINRA and NASAA issued an addendum to that report summarizing additional compliance, supervisory and other practices being used by securities professionals.

The 2010 Addendum focuses on communicating effectively with senior investors; training and educating firm employees on senior-specific issues; establishing an internal process for escalating issues and taking next steps; obtaining information at account opening; ensuring appropriateness of investments; conducting senior-focused supervision, surveillance and compliance reviews.

“Securities regulators continue to bring solid enforcement cases to protect our seniors from investment fraud and abuse,” said NASAA President Denise Voigt Crawford. “Strong regulation coupled with effective industry compliance, supervision and innovative senior-specific practices are essential toward ensuring that our growing population of senior investors is being treated fairly and responsibly by the financial services industry.”

According to the SEC, as a result of the economic downturn, older investors are dealing with smaller nest eggs. The industry regulator estimated that total retirement assets decreased by $4.5 trillion from 2007 to the first quarter of 2009.